How can firms prove their ?good culture? to regulators, when the standard of proof that regulators expect is rapidly moving ahead?  The first official global survey (IOSCO FR05/2019) of how financial Conduct regulators are now using ?Culture measurement? to question customer outcomes was published on the 10 April 2019.  More than 25 financial enforcers around the world - including of course our own FCA - are now using behavioural science to test how well financial firms treat customers.  Regulators broadly agree: their new, behavioural approach is delivering sharper analytical tools that better identify real levels of customer care.  

As never before, regulators now use these tools to question how far customer outcomes are ?acceptable and expected? across a wide range of products, markets and jurisdictions.  Regulators? new tools include top-down Culture Audits; talking directly to front-line staff about their experiences; and Fairness Analysis of specific products.  In the UK, 2019 sees Conduct rules (including SMCR) extending beyond banks to include insurers, asset managers and other providers. Any firms that persist in using a conventional Compliance approach will soon find their culture exposed to critical public scrutiny.

We have created a UK Finance interactive workshop that responds to member firms? concerns that ?The MI we have isn't the MI we need for Culture reporting?.  This continues the premise of our original, popular series of Conduct workshops: that it's better to learn in advance what is expected of your firm, rather than wait and find your front-office staff lost for words in the face of an unexpected Culture question from an FCA case officer.  

Senior lead managers for culture assessment have been asking whether their own approaches are valid and worthwhile, and whether the regulator is likely to approve them when first examined.  To find out what a culture audit means for your firm in practice, you first need to know which elements of behavioural science regulators care about, then how they use them: What culture factors and indicators will you be expected to report?  Where your existing MI falls short, where else do you look for it and how do you frame better audit questions of your own? How vulnerable is your firm, compared with other providers?

Join us on this interactive workshop for first sight of a range of firms? Culture reporting designs; straight answers to common questions from culture project team leaders; an industry-wide informed view of which MI sources are most valuable, and which indicators most effective; and an update on the latest research sources that inform regulators? thinking.

Outcomes

By attending this session you will:

  • Understand the FCA's view of what constitutes acceptable and unacceptable cultures, in the Boardroom, in business lines, product design and compliance functions;
  • See practical examples of indicators used to measure and incentivise a culture of good conduct and compliance; MI that answers the question of ?what good behaviour looks like?;
  • Identify significant patterns of behaviour, both exemplary and prohibited;
  • Be better equipped to assemble a cultural measurement tool and to appraise the value of culture and compliance initiatives.

Take this training in-house

If you have five or more delegates who wish to attend this briefing, it may be more cost effective to run it in-company. To find out more about in-company training, please contact the team on 0203 934 1014 or training@ukfinance.org.uk

Dr Roger Miles

Dr Roger Miles

Financial practitioner turned specialist researcher in the field of regulated Conduct

Dr Roger Miles researches human-factor risks among regulated financial providers worldwide, helping steer their responses to new Conduct regulations, ...

Dr Roger Miles researches human-factor risks among regulated financial providers worldwide, helping steer their responses to new Conduct regulations, Culture Audits and capital charges against Reputation Risk. He convenes knowledge sharing groups of senior executives including forums at UK Finance, whose Conduct and Culture Academy he co-founded in 2017.

Following audit practice with PwC he advised the Boards of large publicly listed companies in the UK, EU and US as a partner in investor relations firm Georgeson & Co. He was Director of Communications and Enterprises for the BBA (under Sir Brian Pitman), UK corporate affairs lead at FBE in Brussels, and later a Head of Risk Communications in HM Civil Service, before giving all that up to requalify as a risk psychologist and university lecturer.

He frequently works by invitation directly with firms? senior leaders on in-house initiatives to develop their frameworks for conduct risk and culture.

With research among more than 400 firms participating in UK Finance Conduct sessions since 2016, he has amassed a unique exemplar body of conduct programmes, reporting designs, indicators and definitions. He welcomes sharing these insights with UK Finance attendees, to inform discussions of ?exemplary practice? in measurement and reporting on conduct, culture and reputation.

Session attendees consistently rate him 5* / 95-100% for ?expertise?, ?ease of understanding?, ?open and engaging?, and ?enjoyable experience?. Each year he leads small-group interactive workshops for more than 1000 attested Senior Managers in financial firms; since 2010 he has taught one-to-one or in small groups, 10,000+ leaders and divisional managers in financial, professional and government service.

His research often uses language analytics and specialist 'sensitive topic research? techniques to identify previously unvoiced concerns. These findings, unique to each firm, guide the design of the firm's framework of human-factor risk indicators and reports, encouraging the start of productive ?conduct conversations? at all levels, embedding spontaneous best practice in risk reporting.

He lectures as a visiting SME at business schools in Cambridge and London, and at UK Defence Academy; and moderates cross-industry working groups for Board appointees, Compliance, Legal and HR professionals.

His published work includes the financial sector's popular handbook Conduct Risk Management: A behavioural approach (2017) and Culture Audit: Reporting on behaviour to conduct regulators (2021), which includes chapters co-authored with senior regulators in the UK, EU, US and APAC. (Both titles available to UK Finance session attendees at a special discount). He co-edits the Encyclopaedia of Key Psychology Concepts for the London School of Economics annual Behavioral Economics Guides and is a contributing editor at Thomson Reuters Regulatory Intelligence.

In 2006-7, using live observation and narrative research, he analysed how banks were ?gaming? their public reporting on regulatory capital. King's College London awarded him a PhD for this work, whose theory was validated abruptly when global financial markets crashed in 2008. In 2010 he accurately predicted the change of financial regime to ?behaviour-based regulation?; the UK's Conduct regime launched in 2013 and included core principles he had earlier identified.

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Chief Risk Officers; Conduct and Culture function leaders, programme and project managers; General Counsel, Corporate and Regulatory Affairs specialists; Human Resource and other Operational Risk managers involved with Conduct and Culture assessments; Director and other senior Risk Governance roles concerned with Conduct Risk.